CEU Electronic Theses and Dissertations, 2014
| Author | Sivak, Tomas |
|---|---|
| Title | Does Higher GDP Per Capita Cause Higher Life Happiness? |
| Summary | The public discussion about the economic policies usually focuses on increases in GDP. But does higher income cause higher life happiness? I focus in my thesis on this subject. If it does not, the main focus of economic policies on GDP growth makes little sense. The association between happiness and income is usually divided into three subgroups. In this thesis I focus on over-time comparison and between-country comparison as in within-country comparison the consensus already exists that higher income is associated with higher happiness. Yet in the two former analyses no consensus exists and therefore I try to make here my contribution. I find that in over-time comparison income plays role (even though not that strong) in EU (panel data approach) but does not play role in US (time-series data approach). It seems that there are more important factors determining life satisfaction, namely unemployment and quality of institutions. In between-country comparison concerning the whole world (cross-sectional data approach) income plays more important role than in the regression just from EU countries. Therefore it looks that income plays more important role in the world than just in EU. However, much more important role play unemployment and institutional quality and especially the presence of communism (in the past or present), for which the impact is the most extreme. If I sum up the main findings of my thesis the increase in income still plays quite important role both in between-country comparison and over-time comparison with the exception of United States where higher income did not make Americans happier. Yet I find more important factors affecting happiness. Those are namely unemployment, institutional quality and (past or present) presence of communism. All of them are both statistically and economically very significant and play much more important role in determining happiness than income. Therefore the focus of economic policies should be more on unemployment and institutional quality rather than income by itself. |
| Supervisor | Koszegi, Botond |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2014/sivak_tomas.pdf |
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